Peter Lynch | P/E/Growth Investor
Last Update: 3/3/2015

Peter Lynch Profile: Perhaps the greatest mutual fund manager of all-time, Lynch guided Fidelity Investment's Magellan Fund to a 29.2 percent
average annual return from 1977 until his retirement in 1990, almost doubling the S&P 500's 15.8 percent yearly return over that time.
Lynch's common sense approach and quick wit made him one of the most quoted investors on Wall Street. ("Go for a business that any idiot
can run -- because sooner or later, any idiot probably is going to run it," is one of his many pearls of wisdom.) Lynch's bestseller One
Up on Wall Street is something of a "stocks for the everyman/everywoman", breaking his approach down into easy-to-understand concepts.

Peter Lynch Investment Strategy: Lynch's approach centers on a variable that he is famous for developing: The price/earnings/growth ratio, or "PEG".
The PEG divides a stock's price/earnings ratio by its historic growth rate to find growth stocks selling on the cheap. Lynch's rationale: The
faster a firm is growing, the higher the P/E multiple you should be willing to pay for its stock. Lynch is known for saying that investors can
get a leg up on Wall Street by "buying what they know", but that's really just a starting point for him; his strategy goes far beyond investing
in a restaurant chain you like or a retailer whose clothes you buy. Along with the PEG, he focused on fundamental variables like the debt/equity
ratio, earnings per share growth rate, inventory/sales ratio, and free cash flow.
It's important to note that Lynch used different criteria for different categories of stocks, with the three main categories being "fast-growers"
(stocks with EPS growth rates of at least 20 percent per year); "stalwarts" (stocks with growth rates between 10 and 20 percent and
multi-billion-dollar sales); and "slow-growers" (those with single-digit growth rates and high dividend payouts). He also used special
criteria for financial stocks.

Benjamin Graham | Value Investor
Last Update: 3/3/2015

Benjamin Graham Profile: The late Benjamin Graham may be the oldest of the gurus we follow, but his impact on the investing world has lasted for
decades after his death in 1976. Known as both the "Father of Value Investing" and the founder of the entire field of security analysis,
Graham mentored several of history's greatest investors -- including Warren Buffett -- and inspired a slew of others, including
John Templeton, Mario Gabelli, and another of Validea's gurus, John Neff. Graham built his fortune and reputation after living
through some extremely difficult times, including both the Great Depression and his own family's financial woes following his father's
death when Benjamin was a young man. His investment firm posted per annum returns of about 20 percent from 1936 to 1956, far outpacing
the 12.2 percent average return for the market during that time.

Benjamin Graham Investment Strategy: Not surprisingly, given that he lived through his family's financial troubles and the Great Depression,
Graham used a conservative, risk-averse approach that focused as much on preserving capital as it did on producing big gains. Trendy,
hot stocks didn't garner his attention; he was concerned with companies' balance sheets and their fundamentals. How much debt did they
carry? How did their stock price compare to the amount of per-share earnings they were generating? Did the firm have strong sales figures?
This value-centric, company-focused approach may be used by a lot of investors today, but it was Graham who first popularized it.
A key concept behind his approach was the "margin of safety" -- the difference between a stock's price and the value of its underlying business.
Graham focused on stocks with high margins of safety (meaning their stocks were selling on the cheap compared to what he believed to be the
intrinsic value of their businesses), because their already low prices offered significant downside protection.

Joel Greenblatt | Earnings Yield Investor
&nbspLast Update: 3/3/2015

Joel Greenblatt Profile: In his 2005 bestseller The Little Book That Beats The Market, hedge fund manager Joel Greenblatt laid out a stunningly simple way
to beat the market using two -- and only two -- fundamental variables. The "Magic Formula," as he called it, produced back-tested returns of
30.8 percent per year from 1988 through 2004, more than doubling the S&P 500's 12.4 percent return during that time. Greenblatt also produced
exceptional returns as managing partner at Gotham Capital, a New York City-based hedge fund he founded. The firm averaged a remarkable
40 percent annualized return over more than two decades.

Joel Greenblatt Investment Strategy: Greenblatt's approach looks only at the return a company generates on its capital, and at the firm's earnings yield
(which is similar, but not identical to, the inverse of its price-earnings ratio). The Greenblatt strategy ranks all stocks in both of those
categories, and then adds their numerical rankings together. The lower the combined numerical ranking, the better. (Our Greenblatt strategy
invests in the 30 stocks with the best combined ranking.) Greenblatt's research shows that while beating the market is hard, it doesn't have
to be complicated. The hard part comes not in developing a complex strategy, but instead in finding a proven approach and sticking with it
through good times and bad. He stresses discipline as much as any of the gurus we follow.

Warren Buffett | Patient Investor
&nbsp Last Update: 3/3/2015

Warren Buffett Profile: Warren Buffett is considered by many to be the greatest investor of all time. As the chairman of Berkshire Hathaway,
Buffett has consistently outperformed the S&P 500 for decades, and in the process has become one of the world's richest men.
(Forbes puts his net worth at $37 billion.) Despite his fortune, Buffett is known for living a modest lifestyle, by billionaire standards.
His primary residence remains the gray stucco Nebraska home he purchased for $31,500 nearly 50 years ago, according to Forbes, and his folksy
Midwestern manner and penchant for simple pleasures -- a cherry Coke, a good burger, and a good book are all near the top of the list --
have been well-documented.

Warren Buffett Investment Strategy: The Buffett-based "Patient Investor" strategy is the only one of our strategies that is not taken
directly from the writings of the guru himself, as Buffett has yet to write about his investment strategies. Our interpretation of
Buffett's approach is based on the book Buffettology, written by Buffett's ex daughter-in-law Mary Buffett. The Buffett strategy buys
stocks with an extremely long-term horizon. In fact, Buffett has held some of his investments for decades, and he's said that Berkshire's
favorite holding period is "forever". Buffett doesn't try to capitalize on small day-to-day stock market movements; instead, he focuses on
a company's business, because he knows that, over time, the stocks of firms with strong businesses and good long-term prospects are likely to
rise considerably, regardless of what those stocks are doing today or tomorrow or next week. To find those strong businesses, this strategy
goes back as far as a decade into a company's history, so only stocks with consistent long-term track records can pass this methodology.

Motley Fool | Small-Cap Growth Investor
Last Update: 3/3/2015

Motley Fool Profile: Brothers David and Tom Gardner often wear funny hats in public appearances, but they're hardly fools -- at least not the kind
whose advice you should readily dismiss. The Gardners are the founders of the popular Motley Fool web site, which offers frank and often
irreverent commentary on investing, the stock market, and personal finance. The Gardners' "Fool" really is a multi-media endeavor, offering
not only its web content but also several books written by the brothers, a weekly syndicated newspaper column, and subscription newsletter services.

Motley Fool Investment Strategy: The Gardners specialize in searching out stocks of small, fast-growing companies with solid fundamentals, including
healthy profit margins, low debt, ample cash flow, respectable R&D budgets and tight inventory controls. A key indicator of a strong stock,
they believe, is an earnings growth rate that is greater than the stock's price/ earnings ratio. Wall Street calls this metric the PEG ratio
(price/earnings-to-growth ratio); the Gardners call it the Fool Ratio. By either name, it's a great way to separate attractively valued growth
stocks from those that are overvalued. The Motley Fool investment strategy will appeal to investors seeking solid growth companies in the
small-cap sector of the market.

David Dreman | Contrarian Investor
Last Update: 3/3/2015

David Dreman Profile: Dreman's Kemper-Dreman High Return Fund was one of the best-performing mutual funds ever, ranking as the best of 255 funds in
its peer groups from 1988 to 1998, according to Lipper Analytical Services. At the time Dreman published Contrarian Investment Strategies:
The Next Generation, the fund had been ranked number one in more time periods than any of the 3,175 funds in Lipper's database. In addition
to managing money, Dreman is also a longtime Forbes magazine columnist.

David Dreman Investment Strategy: Dreman believed that investors are prone to overreaction, and, under certain well-defined circumstances, overreact
predictably and systematically. They typically overvalue the popular stocks considered the "best", and undervalue those considered the "worst",
often going to extremes in these over- and under-valuations. Because of that, he focused on stocks that most investors were shunning -- those
with low price/earnings, price/book, price/dividend, and/or price/cash flow ratios. Then, to separate stocks that had been beaten down because
of investor overreaction from those that were outright dogs, he applied a number of other fundamental tests, looking, for example, for a high
current ratio, high return on equity, high pre-tax profit margins, and a low debt/equity ratio.

Martin Zweig | Growth Investor
&nbsp Last Update: 3/3/2015

Martin Zweig Profile: During the 15 years that it was monitored, Zweig's stock recommendation newsletter returned an average of 15.9 percent per year,
during which time it was ranked number one based on risk-adjusted returns by Hulbert Financial Digest. Zweig has managed both mutual and hedge
funds during his career, and he's put the fortune he's compiled to some interesting uses. He has owned what Forbes reported was the most
expensive apartment in New York, a $70 million penthouse that sits atop Manhattan's Pierre Hotel, and he is a collector of all sorts of pop
culture and historical memorabilia -- among his purchases are the gun used by Clint Eastwood in "Dirty Harry", a stock certificate signed by
Commodore Vanderbilt, and even two old-fashioned gas pumps similar to those he'd seen at a nearby gas station while growing up in Cleveland,
according to published reports.

Martin Zweig Investment Strategy: Zweig is a growth investor with a serious conservative streak. To pass his strategy, a stock must meet a slew of
earnings-related criteria, showing that its earnings growth is: at a high rate over the long haul; persistent over several years in a row;
accelerating in more recent quarters; and sustainable, i.e. driven by sales growth, not cost-cutting measures. In addition, Zweig wanted to
make sure he wasn't paying too much for a company's growth. If a stock was selling at a price/earnings multiple that was more than three
times the market average, or greater than 43 regardless of the market P/E, he avoided it. Another part of his conservative streak: Zweig
wanted a firm's debt/equity ratio to be low compared to its industry average.

Kenneth Fisher | Price/Sales Investor
Last Update: 3/3/2015

Kenneth Fisher Profile: The son of Philip Fisher, who is considered the "Father of Growth Investing", Kenneth Fisher is a money manager,
bestselling author, and longtime Forbes columnist. The younger Fisher wowed Wall Street in the mid-1980s when his book Super Stocks
first popularized the idea of using the price/sales ratio (PSR) as a means of identifying attractive stocks. According to his alma
mater, Humboldt State University, Fisher is also one of the world's foremost experts on 19th century logging. Appropriately, Fisher's
firm, Fisher Investments, is located in a lush forest preserve in Woodside, California, where the contrarian-minded Fisher says he and
his employees can get away from Wall Street groupthink.

Kenneth Fisher Investment Strategy: Fisher found that earnings -- even the earnings of good firms -- could vary from year to year based on things
(accounting changes, decisions to upgrade facilities, increased research costs that will lead to bigger profits down the line) that had little
to do with the prospects of the company's underlying business. Sales, however, were far more stable and thus a better indicator of the strength
of a company's business, making the PSR a very useful tool. Fisher wanted stocks with low PSRs, and he used different standards for different
types of companies. He also wanted to see strong earnings growth, high profit margins, and low debt. In addition, for technology and medical
companies, Fisher viewed research as a commodity. When analyzing these firms, he used the "price/research" ratio (PRR), which divides a firm's
market cap by the amount it is spending on research. Fisher has changed his strategy today, but his PSR-focused approach has continued to produce
strong results for us.

James P. O'Shaughnessy | Growth/Value Investor
Last Update: 3/3/2015

James P. O'Shaughnessy Profile: Research guru and money manager James O'Shaughnessy forced many professional and amateur investors alike to rethink their
investment beliefs when he published his 1996 bestseller, What Works on Wall Street. O'Shaughnessy back-tested 44 years of stock market
data from the comprehensive Standard & Poor's Compustat database to find out which quantitative strategies have worked over the years and
which haven't. To the surprise of many, he concluded that price/earnings ratios aren't the best indicator of a stock's value, and that
small-company stocks, contrary to popular wisdom, don't as a group have an edge on large-company stocks. Today O'Shaughnessy heads
O'Shaughnessy Asset Management.

James P. O'Shaughnessy Investment Strategy: Based on his research, O'Shaughnessy developed two key investment strategies: "Cornerstone Growth" and
"Cornerstone Value." Cornerstone Growth favors companies with a market capitalization of at least $150 million and a price/sales ratio
below 1.5. It also looks for companies with persistent earnings growth over a five-year period, and shares that have been among the
market's best performers over the prior 12 months. This strategy makes sense for value-oriented growth investors who have the patience
and personality to stick with a purely quantitative investment approach. Cornerstone Value looks for large companies with strong sales and
cash flows, and solid dividend yields. It is appropriate for income-oriented investors.

John Neff | Low PE Investor
&nbsp Last Update: 3/3/2015

John Neff Profile: While known as the manager with whom many top managers entrusted their own money, Neff was far from the smooth-talking,
high-profile Wall Streeter you might expect. He was mild-mannered and low-key, and the same might be said of the Windsor Fund that he
managed for more than three decades. In fact, Neff himself described the fund as "relatively prosaic, dull, [and] conservative." There
was nothing dull about his results, however. From 1964 to 1995, Neff guided Windsor to a 13.7 percent average annual return, easily
outpacing the S&P 500's 10.6 percent return during that time. That 3.1 percentage point difference is huge over time -- a $10,000 investment
in Windsor (with dividends reinvested) at the start of Neff's tenure would have ended up as more than $564,000 by the time he retired, more
than twice what the same investment in the S&P would have yielded (about $233,000). Considering the length of his tenure, that track record
may be the best ever for a manager of such a large fund.

John Neff Investment Strategy: Neff's approach was "relatively prosaic" and "dull" because it focused on the market's unloved. Neff identified these
stocks using the price/earnings ratio, seeking stocks with P/Es that were between 40 to 60 percent of the market average. From this group, he
looked for firms with steady, sustainable EPS growth (between 7 percent and 20 percent per year, and driven by sales growth), as well as positive
free cash flows. He also used what he called the "total return/PE" ratio, which combined a stock's growth rate and dividend yield and divided
that by its P/E ratio to find good values. The variable underscored Neff's belief that strong dividends were an often-overlooked part of how
investors could beat the market.

Joseph Piotroski | Book/Market Investor
&nbsp
Last Update: 3/3/2015

Joseph Piotroski Profile: Piotroski isn't your typical Wall Street big shot. In fact, he's not even a professional
investor. He's a good old numbers-crunching accountant and college professor. But in 2000, shortly
after he started teaching at the University of Chicago's Graduate School of Business, Piotroski
published a groundbreaking paper in the Journal of Accounting Research entitled "Value Investing:
The Use of Historical Financial Statement Information to Separate Winners from Losers". In it,
Piotroski laid out an accounting-based stock-selection/shorting method that produced a 23 percent
average annual back-tested return from 1976 through 1996 -- more than double the S&P 500's gain
during that time. Piotroski's findings were reported in major financial publications like SmartMoney.
Today, he teaches accounting at Stanford University's Graduate School of Business.

Joseph Piotroski Investment Strategy: Piotroski's methodology starts by narrowing stock choices to those trading in the top 20 percent of the
market based on their book/market ratios (or, conversely, the bottom 20 percent of the market based on price/book ratios). He found
that just buying low price/book stocks does not produce excess returns over the long term, because many low price/book companies are
trading at a discount because they deserve to -- they're dogs with poor prospects. When he applied a series of additional tests of
financial strength to these low price/book stocks, however, Piotroski was able to separate the dogs from the good prospects. Among the
variables he examined: return on assets, current ratio, cash flow from operations, change in gross margin, and change in asset turnover.
The strategy usually finds smaller companies whose stocks are flying under Wall Street's radar.

The names of individuals (i.e., the 'gurus') appearing in this report are for identification purposes of
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Performance results are based on model portfolios and do not reflect actual trading.
Returns for both the model portfolios and the comparable benchmarkss do not include dividends.
Actual performance will vary based on a variety of factors, including market conditions
and trading costs. Past performance is not necessarily indicative of future results.
Individual stocks mentioned throughout this web site may be holdings in the managed portfolios of Validea Capital Management, a separate asset management firm founded by Validea.com founder John Reese.
Validea Capital Management, which is a separate legal entity and an SEC registered investment advisory firm, uses, in part, the strategies on the web site to select stocks for its clients.